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Was Hollywood Built on Piracy?

7 May 2012

From Copyhype:

Was Hollywood built on piracy? That’s what some seem to suggest. Lawrence Lessig’s version of this story from his 2004 book Free Culture is archetypical:

The Hollywood film industry was built by fleeing pirates. Creators and directors migrated from the East Coast to California in the early 20th century in part to escape controls that film patents granted the inventor Thomas Edison. These controls were exercised through the Motion Pictures Patents Company, a monopoly “trust” based on Edison’s creative property and formed to vigorously protect his patent rights.

California was remote enough from Edison’s reach that filmmakers like Fox and Paramount could move there and, without fear of the law, pirate his inventions. Hollywood grew quickly, and enforcement of federal law eventually spread west. But because patents granted their holders a truly “limited” monopoly of just 17 years (at that time), the patents had expired by the time enough federal marshals appeared. A new industry had been founded, in part from the piracy of Edison’s creative property.

This little bit of historical revisionism has popped up regularly since then.

. . . .

The early years [of the motion picture industry] saw some patent skirmishes between rival companies as film began to grow in popularity. In 1908, Edison helped form the Motion Picture Patents Company (MPPC) with other patent holders. Together, they held a virtual monopoly on the movie industry; their patents covered projectors, cameras, and film stock. Their control went beyond patents, however. Using tie-in agreements and licensing, and forming the General Film Corporation to monopolize film distribution, they locked out competition at every step, from making movies to exhibiting them.

. . . .

The independents weren’t infringing on any patents themselves, they were violating the license and tie-in agreements that came with the MPPC’s equipment. The MPPC did enjoy some early success with its litigation efforts, convincing several courts that illegal restraint of trade was not a defense to patent infringement.

But the MPPC didn’t rely solely on the law — Edison enforced the Trust’s domination with violence. Hired thugs would smash cameras and raid the independents’ places of business.

. . . .

The organization’s anti-competitive tactics caught the attention of the US government, which took action against them. In 1916, the Eastern District Court of Pennsylvania entered a decree against the Motion Picture Patents Co. The judge found that the MPPC, the General Film Company, and the individual companies involved had “attempted to monopolize and have monopolized and have combined and conspired … to monopolize a part of the trade or commerce … consisting of the trade in films, cameras, and projecting machines” in violation of the Sherman Antitrust Act. It declared all the contracts, patent licenses, and patent assignments used by the MPPC illegal.

The trust also began suffering setbacks in the courts, and in 1917, the US Supreme Court unequiovically struck down one of the license agreements that the MPPC had used to extend its monopoly.

. . . .

[T]he claim that the independent studios ran to Hollywood to get away from Edison and his legal threats is greatly overstated. Southern California offered many advantages over the established filmmaking centers of New York and Chicago that provide stronger reasons for the migration.

Geography, for one. California offered a wide variety of scenery that was useful as substitutes for all sorts of locations.

. . . .

Weather played a huge role too — LA offers 70 degree year-round weather as opposed to winters in New York or, worse, Chicago. Peter Ediden of the New York Times notes, “This wasn’t merely a matter of comfort; even the brightest electric lights of the time were too dim to  expose film properly, so a run of cloudy days could halt production at, say, the Edison studios in East Orange, N.J.”

In fact, nearly everything about the area was an improvement. Land was cheaper and more available and the costs of labor were lower.

Link to the rest at Copyhype

Copyright/Intellectual Property

13 Comments to “Was Hollywood Built on Piracy?”

  1. brendan stallard

    “Hollywood Built on Piracy?”


    Yup, and they’m still at it now, as anyone who has had the misfortune to fool with film companies and their peculiar financing finagling, or their miserable DRM and region code fiddling.

    Although the friendly folk with hairy hands have mostly broken the back of that last nonsense now.


  2. Rationalizations to justify stealing from others. Even if it is/was built on piracy, does that make it right? No more than the fame of Charles Manson being spread abroad makes murder right and we should ditch the laws on murder and manslaughter.

    • Lessig’s point in Free Culture isn’t about eliminating copyright law. I suggest you read the book and see if it changes your perspective. You can get it for free as a PDF.

      Lessig was one of the big forces behind starting the Creative Commons. CC helps people get paid for their work, but also wants to enable creators to share their work as they see fit.

      • Granted, I have not read the book. The blurb on Amazon seems to be more about the issue of “Big Media” controlling “culture.” So I honestly cannot critique him and his book, as such.

        That said, the presentation of piracy as a good thing, which is what the above quote seems to imply, that stealing is beneficial and sought after, and thus implied it should be the norm and given free reign, is what I would be against.

        If the quote in question isn’t making that point and is taken out of context, fine and good. But out of context, that is what it is implying. If not for piracy, Hollywood would not exist.

        So hooray for piracy and stealing!

      • I think the point the author is making about the Lessig excerpt is that the whole “Hollywood started out as a bunch of IP pirates” is urban legend and the court decisions were what broke up Edison’s movie monopoly.

        Lessig is a smart guy with a lot of good ideas, but he has a few that I don’t find persuasive.

        • Agreed. Partially.

          I do think that Lessig’s point is that at the time, whatever his tactics, Edison had a valid patent and the independent studios acted illegally first, then sued(and won) later.

          Copyright law is antiquated. You don’t need to fudge facts to point out that the code for Microsoft Word is very different than the TV playing in the back of the youtube video of your kid first steps. The idea that some personal, non-commercial, “piracy” should be permitted and even encouraged tends to get mixed up with the possible economic harm of large scale piracy (even though that has never been proven).

          I don’t buy some of Lessig’s rhetoric, but on one hand you have the constant rejiggering to keep Mickey out of the public domain, and on the other there is massive piracy that kids (12 to 35) today, and my elderly parents, don’t see as immoral. That is a problem.

          • “The idea that some personal, non-commercial, “piracy” should be permitted and even encouraged tends to get mixed up with the possible economic harm of large scale piracy (even though that has never been proven).”

            I don’t think a copyrighted program playing in the background would be piracy or illegal. If anything, it would fall under fair use. Recording and showing the video on YouTube, would be piracy if you didn’t have permission to do so.

            Sure, sometimes there are gray areas, but usually it isn’t such a hard thing to decide whether someone is violating someone else’s copyright or patent. But there is some gray there. And I don’t see how you can totally eliminate that. How much would someone have to change the incidental facts and names in one of my books, then publish it themselves to not be plagiarism? Some people get on the edge of that, and no matter where you draw the line, there will always be those who push it.

            Also, copyright isn’t purely an economic interest. It is ownership of the right to copy something. If I own it, no one but me has the right to decide whether copies can be made and sold or given away for free. It isn’t theirs to take or give. So to me the economic loss, if it can be established, is a side issue that might relate to damages, but just like anything else I own, if it gets taken, that is stealing from me.

            So piracy can’t be justified because it doesn’t hurt anyone economically, for instance. Like in my case, as an author who few have heard of, I’m sure the case could be made that any of my work that is pirated probably would be helpful to me financially, because it reduces my obscurity and others that read something may talk about it to others who then go and buy it. That’s why we give away books to reviewers, and why I just had one of my books on Amazon be on their free program. But, I made that decision, not someone else. And just because the piracy might even be helping me financially, doesn’t mean it is right and not stealing from me.

            But someone who isn’t obscure, like Stephen King or J. K. Rowling, I’m sure it could be shown that piracy reduces the books they would have sold, that there are more people in that case who would have bought it, but found it for “free” somewhere that it was pirated, so now they don’t have to go and buy it. Which is why it was worth Ms Rowling’s time and money to sue some people over it.

            • There is no fair use exception for “background noise” or accidental infringement. In particular if it is a currently popular song, expect at the very least to have the audio track ripped out of your video, it is more likely the video will be automatically removed. Is that legal? Probably, under currently copyright law. It is a public exhibition of copyrighted material.

              The only “interest” in copyright is economic. The point, and only purpose, of copyright law is to allow the artist/coder/corp to profit from their creation. If they aren’t stealing something of monetary value (a copy), is it stealing?

              Actually, the theories of how piracy positively impacts earnings would say the opposite is true. They looked at the data that showed that the most popular things are pirated the most (duh) and that after they were pirated earning rose, but that for the less popular works after they were pirated earnings tend to fall. The effect of piracy is amplification, i.e. SK or JKR get a larger benefit from piracy, than he small guy. Transformers 2 get a bigger bump than John Carter. I’ll hunt around and see if I can find the study, it was an interesting read.

            • Only if the background noise was a good hunk of the full song, would it go beyond fair use. But even the dreaded SOPA law made exceptions to such incidental usage in videos on YouTube type things. IOW, SOPA wasn’t going to go after someone even making a cover music, at least based on what the law said.

              I agree that economic interest are protected, but only by association with ownership. For example, if someone broke into my house and took my TV, yes it has some economic value, and they probably were motivated to steal it because they can pawn it off and get money. But whether they used it to get money or wanted a TV for their own use, the bottom line that makes it theft is that I owned it, and they stole it from me. Whether they make any money with it or not is not the point. It has value in and of itself to me and was mine.

              Now, the whole copyright thing is a bit different, yes, because it isn’t a physical object, and what they are stealing is a copy of my book, not my original manuscript that I still have. And assuming they never would have bought my book to begin with, so them getting a copy of it would not represent lost sales to me. The fact still remains what they did was illegal and they stole it from me. They didn’t have the right to make a copy of it. Just because they didn’t profit from it and I didn’t lose anything doesn’t mean they didn’t do anything illegal or steal from me. They are still getting value from reading my book.

              But the study you mentioned would be interesting to read.

  3. Only the victors write the histories.

  4. Actually, I have to disagree that Lessing was wrong. His ideas aren’t new. All he was saying is what has been recorded in movie history since the start, it’s in all the primary sources. It may be “enhanced” as urban legend, but it’s also real history.

    The fact that court decisions broke up the Edison monopoly doesn’t alter the fact that the movies thrived before that happened — and all because a billion shopgirls with nickels were not to be denied.

    You might compare it to the DOJ case going on right now. The legal case may have all sorts of ramifications, but breaking up that monopoly will happen whether the DOJ acts or not.

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